Course Description
An overview of the application of economic analyses to forest
resources. Forest resource professionals will be given a better
understanding of the economic factors that influence forest
management decisions.
Additional Requirements for Graduate Students:
Students will be graded on a different scale. They will be
assigned readings from academic literature covering advanced
concepts in forest economics and finance. They will have to
complete a term project which will involve a written analysis of
a real-world management problem. The analysis will involve the
use of Excel to program and solve complex forest economics and
finance problems.
Athena Title
Forest Economics
Prerequisite
Second-year student standing
Semester Course Offered
Offered fall
Grading System
A - F (Traditional)
Student learning Outcomes
- By the end of this course, students will know the economic and financial tools needed to analyze and solve real-world forest management problems.
- By the end of this course, students will understand the economic factors that influence forest management and forest products decisions.
- By the end of this course, students will have developed decision-making skills necessary to effectively meet private and public goals and evaluate the impacts of policies and markets on forestry.
Topical Outline
- 1. Review of Economic Principles:
Demand and supply; price, quantity, and scarcity; revenues and
costs; production functions; marginal analysis; profit
maximization.
- 2. Market Allocation of Resources:
Market structure; the role of prices; welfare analysis; market
failures.
- 3. Capital Theory:
Interest rate; compounding and discounting.
- 4. Investment Evaluation Criteria:
Net present value, internal rate of return; benefit to cost
ratio, pay-back period; project selection criteria.
- 5. Management of Forest Capital:
Financial maturity, optimal rotation length, timber stand
improvement, and stocking.
- 6. Forest Taxation:
Income, property, and forestry taxes; measuring tax impacts.
- 7. Inflation and Risk:
Real and nominal rates of return; risk-free and risky revenues;
adjusted discount rates.
- 8. Forest Valuation and Appraisal:
Stumpage valuation; appraising market value, appraising damage
costs; non-timber influence on forest markets
- 9. Multiple-Use Forestry:
Valuing nonmarket forest ouputs; multiple-use goals and trade-
off analyses.
Institutional Competencies Learning Outcomes
Analytical Thinking
The ability to reason, interpret, analyze, and solve problems from a wide array of authentic contexts.
Critical Thinking
The ability to pursue and comprehensively evaluate information before accepting or establishing a conclusion, decision, or action.
